By Marina Joseph – Art in Tanzania Internship
Digital payment sometimes called electronic payment refers to payments that are conducted over the internet and mobile channels and hence, any payment that is sent online or through mobile computing and internet-enabled devices can be called such. And with a number of cultural, societal, and technological worldwide trends intersecting, we’re now seeing the demand for electronic payments increase. Digital payments offer significant benefits to individuals, companies, governments, or international development organizations. The benefits of going digital include:
- The need to handle cash is greatly reduced
- More hygienic
- Transparency and security by enhancing traceability and accountability, reducing corruption and theft as a result.
- Financial inclusion by increasing access to a range of financial services, including savings accounts, credit, and insurance products
- Saves time
- Saves money
We will focus on the last two benefits for this post
- Saves time
Valuable time is saved as customers simply swipe or tap to pay. No more digging through wallets or purses looking for coins – and moreover sellers don’t need to count out the correct change when someone pays for a low-value item with a large note. Searching for small notes, counting out exact change, and writing checks require more time and energy. Paying via card, contactless, mobile wallet, or wearable device is almost always faster than using cash. Customers could use that time to have a conversation with your staff, enroll in your loyalty program, or give your company a good review online.
- Saves money
There are no additional charges when accepting contactless payments once acceptance of chip and PIN is completed. You’ll simply pay the same as you would for regular card transactions. There are plenty of packages out there to cater for businesses of all sizes, budgets, and transaction volumes. While some are hesitant to switch over for fear of fees, the Visa data showed that processing digital payments was 57 percent less expensive than non-digital payments once fees and labor costs are accounted for. Expenses related to fraud also cost less with digital payment
MEANINGFULNESS OF ONLINE PAYMENT TO RURAL COMMUNITIES
Digital payments expansion to rural customers or areas has been a challenge for financial services providers in developing countries. However, such institutions are motivated and willing to go through it because of what it will mean to rural communities. This is because when such services expand to rural and remote areas there is promise for development and growth in several ways.
The following is the meaningfulness of online payment to rural communities.
Easier Access to Economical Facilities
People from rural areas struggle to get their wages paid and get their pension. It is even harder for them to be aware of benefit schemes they are eligible for. With mobile banking speed is achieved which solves their problems. In addition, the reduced transaction and travel is another benefit.
A Boost to Rural Businesses
Mobile banking has various aspects such as e-commerce and making instant digital transaction, once the rural population gets more comfortable with it they can use the same technology to grow their businesses. This is due to the availability of better reach and convenience
Hassle-Free Bank Accounts
The location of bank branches in rural and remote areas maybe very far away, use of digital payments helps people set up bank accounts without having to visit the actual bank branch. It helps them save the time money and energy and redirect to other activities.
Financial Inclusion
The rural population have to travel long distances to get even the simplest of financial services. Digital payments make the availability of simply using your phone to avail a wide range of financial services.